Pressure is mounting on California officials to contain the ballooning costs of retirement homes for veterans so more money can be freed to provide other essential services for the next generation just returning home from wars in Iraq and Afghanistan.

Bottom line numbers show taxpayers spend a lot of money to serve relatively few residents of veterans homes: nearly $190 million for about 2,000 veterans in 2011-12.

A state audit of veteran homes due out Thursday is expected to expose systemwide failings and questionable spending — as well as provide a guide for reforms.

The actual cost to the state general fund is eased somewhat by federal payments, insurance and other reimbursements. But the push is on to find savings.

“We want to make sure they are well taken care of,” said Assemblywoman Toni Atkins, a San Diego Democrat active in veteran issues. “But when you’re dealing with limited resources you have to look at how to put the pieces of the puzzle together so we really are getting as much efficiency as we can.”

The audit — nearly a year in the making — may prompt some hard questions: Should some veterans needing specialized care be steered into privately-run homes so the federal government picks up the tab? Should the state hand over more services, such as health care and food service, to private contractors? And how should the state better assimilate younger homeless veterans with mental health issues and drug problems into the homes, if at all?

The California Department of Veterans Affairs defends the spending, but adds it is taking steps to reduce costs by 7 percent while ramping up bed capacity throughout its network of homes from Chula Vista to Yountville to Redding.

“These are veterans who are at their end of their lives. In most cases they have the most severe need. They have no other means of support or place to take care of them,” said Pouneh Simpson, the department’s chief financial officer.

Trimming those costs, opening two long-delayed homes and unearthing more resources to help newly discharged service members find housing and qualify for federal benefits are just a few of the perplexing challenges facing Gov. Jerry Brown and lawmakers as they negotiate budget priorities for the Department of Veterans Affairs.

“Let’s look at every activity we have and ask why are we doing it,” said Assemblyman Rocky Chávez, R-Oceanside, a retired Marine Colonel who was once acting secretary of the state Department of Veterans Affairs.

Numbers disputed

The Department of Veterans Affairs says $100.8 million out of the 2011-12 state general fund went to care for 2,082 residents, or $48,433 each. That’s the net cost to the state’s general fund after subtracting reimbursements.

Critics say the department’s numbers are understated, arguing that more accurate per capita annual cost is closer to $100,000 after factoring in all government expenses that come out of taxpayer pockets.

The department disagrees, saying the six-figure estimate does not subtract reimbursements from private insurers and also does not take into account $20.7 million returned to the general fund when new homes in Redding and Fresno could not open as scheduled.

In 2011-12, the Department of Veterans Affairs operated on an overall $372.7 million budget for all of its various programs, but not all of that went to run the homes and the federal government provided a large share.

Nearly 2 million veterans live in California and 228,500 of them are in San Diego County. Those ranks are expected to swell as the two wars wind down and belt-tightening in the Department of Defense continues.

California operates six veteran homes, including one in Chula Vista. The oldest, in Yountville, opened in 1880. Redding and Fresno homes are scheduled to open this fall.

The average age of the slightly more than 2,000 residents is 79; most are WW II veterans although 104 served during a period of peace.

Applicants must be 55 years old, but the age requirement is waived for the disabled and those who are homeless — the latter must pass a screening test to make sure they do not pose a danger to other residents.

Fees are based on income and level of care they need — the cap ranges from $2,400 to $5,600 monthly. The average veteran in those homes earns less than $24,000 a year. Residents in the older three veteran homes — Chula Vista, Yountville and Barstow — pay on average $51 per day, or $1,518 per month.

One of those is Ruth Adams, 90, who served as a nurse in Germany in the waning days of WW II.

Ruth Adams, a resident of the Chula Vista home, served a nurse during World War II.
— Nelvin C. Cepeda

+Read Caption

Ruth Adams, a resident of the Chula Vista home, served a nurse during World War II.
— Nelvin C. Cepeda

Adams, has been a resident at Chula Vista for more than 8 years, passing her days volunteering to help residents take their blood pressure and mending clothes.

Like many, Adams believes the state has an obligation. “We served our time to protect our country,” she said.

Without a place to go, Adams said she probably would have had to live alone in her former mobile home in Spring Valley. “My children don’t have to worry about what happens to mom. That’s very important to me,” she said.

Expanding services

The department has become more aggressive in taking in the homeless. Since September, 63 of the 190 admitted had been living on the streets. The state also has a pilot program in its Barstow home to help formally homeless with counseling, job training and other specialized programs in the hopes of getting them a job and place of their own. At Yountville, the state works with Pathway Homes to provide programs for homeless or those with post-traumatic stress disorder or substance abuse problems.

There are an estimated 16,000 homeless veterans in California. Of those, about 1,750 are in San Diego County, according to federal counts.

Homelessness is just one of the issues. Advocates for veterans say better budget management in the homes division would help improve services on a number of other fronts. For example, there is increased urgency in helping veterans navigate the complex process for federal benefits that often go unclaimed.

Many lawmakers are pushing to provide more funding to provide experts to help veterans apply for benefits, from disability payments to health care. They estimate spending $11 million on extra help could bring in another $400 million in benefits for veterans.

In the most recent estimates, 7,981 of the 28,765 pending claims from San Diego County veterans are unresolved 12 months after being filed. Another 826 have languished for more than two years.

“I want to look at how to provide what they need more efficiently. We have to make wise investments,” said Sen. Ben Hueso, D-San Diego, chairman of the Veterans Affairs Committee.

Hueso said the price tag is high, but believes taxpayers stand behind veterans.

“People in the community would agree that those who have made the ultimate sacrifice deserve it,”

One challenge is finding the cash to fill beds that are left unused because of budget shortfalls.

The state expects to house 1,960 residents in 2013-14. That’s far short of how many could be admitted if money for more beds was available. The state has a physical capacity of 2,995 beds, but just 2,223 of those are licensed and only about 2,000 are funded.

Meanwhile, there are 544 veterans on a waiting list, including 87 who applied at Chula Vista.

“Part of the problem is we have more beds and more space than the budget can support,” Atkins said.

That could change with the opening of homes in Redding and Fresno this fall. Also, the state is ramping up to full capacity homes in West Los Angeles, Ventura and Lancaster.

Those five homes combined will have 966 beds and the state is contractually obligated to the federal government to make sure there is funding for those beds.

Involving private sector

Private homes could help cut state costs says Gil Acevedo, a former administrator at the Chula Vista home and ex-top official in the Minnesota veterans department.

“There are many good senior living companies and organizations with a passion for veteran care,” Acevedo, now a private health care consultant in Minnesota, said in an email. “Instead of building new veteran homes we should look at ways to help our veterans access care in the community of their choosing and if that is a state veterans home it’s their choice.”

Assemblyman Chávez agrees, going further to suggest the state should be exploring more ways to help families take in veterans. He also supports contracting out some services and possibly even turning over day-to-day operations to private caregivers.

Steve Arends, a retired Navy pilot who helped lead the campaign for a home in Chula Vista, agreed that the state needs to look to the private sector.

“It should be based on the best value for the taxpayer,” said Arends, who lives in the city and not in the home.

Simpson, the department’s budget writer, worries about a rush to bringing in private contractors to run the state homes, like Texas does.

She pointed to a U.S. Center for Medicare and Medicaid study that gave its highest five-star rating to Chula Vista. No California home scored lower than three stars while two Texas homes were rated with just one star and none earned more than four stars.

Gov. Brown has proposed to increase the department’s overall budget by $60 million in 2013-14.